Episode 23: Claims in the CBD Industry: Too Good to be True?



Joe: On this episode of the "CBD University Podcast," claims, claims and more claims. You may have read or seen claims made by companies promoting products as a cure for just about anything, what you need to know about companies who make claims regarding their products and what exactly can you and can't you say regarding CBD products. We're claiming this will be a great episode of the "CBD University Podcast," and it starts right now.

I'm Joe Agostinelli, host of the "CBD University Podcast." If you are a returning listener, welcome back to our podcast and if you are a new listener, we are glad you found us on your podcast platform of choice. I invite you to subscribe on our podcast, receive notifications when new episodes are published. On this episode, we are talking claims. And outside of me claiming, this is a great podcast and you should tune in to all of our episodes, there are things in the CBD industry that you can and cannot say. We've all seen the news and read the headlines of companies being warned by the FDA.

So I welcome to our podcast, Margaret Richardson, who is in studio here today. We are and in full transparency, this episode being recorded here in the middle of the COVID-19 pandemic. So we are social distancing in our studio and Margaret is in studio and then joining us remotely is our industry advocate and attorney Rod Kight. Hello, Rod.

Rod: Hi, Joe. Hi, Margaret. How are y'all doing?

Margaret: Great, thanks.

Joe: I hope you and the family are staying safe and healthy.

Rod: Thank you. We are. I'm working from my kitchen right now, so if you hear a dog barking or a guitar playing, it's my dog barking or the neighbor's dog or it's my son playing guitar in the basement. So we're doing the whole shelter in place thing here in Asheville, North Carolina.

Joe: That's great. I've seen across social media, especially with the video conferencing, different videos of what has been going on during meetings and not realizing that the cameras are on. So for those of you used to our podcast, this is not an episode where we will have full video and audio, only on your podcast app of choice, and that saves any of us from being subject of any of those social media viral videos. But that's good to hear you guys are all doing well.

First of all, as I mentioned, this episode being published during this uncertain time in our country as we deal with this global health pandemic. And it's times like these where you will probably come across claims, by companies about their products and cure this, cure that and just about curing everything under the sun. And, first off, Rod, you wrote a recent blog regarding this very case and the title makes it abundantly clear,

"Do not claim that your CBD helps with COVID-19." Talk a little bit about that column.

Rod: I thought it was important to write an article about COVID and CBD companies making claims and that arose out of some claims by Neuro XPF that made claims about its CBD products assisting with COVID and it received an FDA warning letter. And I thought it was important to write about that for a few reasons, which I'm happy to go into but just briefly, and Margaret can attest to this because we're on the same page, you know, CBD companies should not make medical claims, period. This is something that we've preached for years in general and it's something that the FDA is on top of. It's something that plaintiffs' lawyers suing companies are on top of.

And then when the COVID-19 pandemic hit a lot of, well not a lot, but some CBD companies, you know, saw that as an opportunity to try to sell products, particularly in a down market, you know, a lot of things are down right now and that, you know, misleads consumers, it makes the industry at large which is really done a whole lot of work to gain legitimacy, it makes the industry at large look like people just being opportunistic sellers of snake oil. And also it's just another reason to reiterate to my clients and my readers that medical claims are off-limits for CBD right now.

Joe: And one thing you don't want to get at any time in the industry is one of those letters from the FDA. And, Margaret, talk a little bit about these letters from the FDA. And this isn't something that just happens in a crisis like this. FDA letters are something that happens all of the time when there's products or even out in social media if a company is making false claims. So talk a little bit about these letters and why they're sent and what's the result of them?

Margaret: So the FDA has several mechanisms to enforce their rules. One of the most commonly used because it gets a lot of attention is what's called a warning letter. FDA warning letters at least in the CBD industry have primarily been focused on claims. You may recall that in December of last year, they sent out 15 warning letters to a variety of different CBD industry manufacturers making claims, for instance, that a product cured cancer or a product cured autism or, you know, just kind of anything.

The FDA has made it I think more than abundantly clear, not only through the warning letters, which is a really good mechanism for people who haven't been in an FDA-regulated industry to understand what they think is appropriate. It is one of their guidance tools. So every company once a warning letter is published, they immediately look at it, they are public so everybody in the world can review them. And it is a way for you to understand the expectations of the FDA and what they will and will not accept.

So the warning letters are just one of kind of their tools. They do like to use it quite a bit because it gets attention, it's very public. They are published so any person in the U.S. can go to the FDA website and look up every warning letter that's ever been sent out. But again, their main focus on the CBD side, and they reiterated this in their most recent report to Congress that was required as a result of the 2018 Farm Bill was, "Hey, you can't make claims like this. You know, we're gonna take enforcement discretion. We're not gonna get every single CBD product off the market but we definitely are gonna go after you if you start saying things that make the product seem like it's going to cure, treat or prevent some type of disease." That is their real focus. They don't want people to do it. And it's true for a variety of products. You'll see that also they use the same kind of warning mechanism in dietary supplements and other food products.

Joe: And cheap plug, you'll also notice there's an FDA statement right at the end of all of our podcast episodes. And, Rod, I'm sure across the industry and in your many travels you've probably seen and read a number of cases where all sorts of claims are made that although, you know, you know are not true, maybe hard for a consumer to understand what is and isn't true. Elaborate on some of those claims that maybe you've come across as part of being an industry advocate.

Rod: Well, Joe, I mean, I've seen a lot of claims. Some are very soft or mild claims, you know, that something can help with anxiety or with sleep and then some are just hardcore, it cures COVID or cures cancer, you know, and I've seen it and everything in between. And, you know, I think two points I want to stress. One is that as Margaret said, the FDA is primarily concerned with claims. You know, the FDA's position is that CBD cannot be used as a food ingredient or marketed as a dietary supplement. By and large, it has exercised its enforcement discretion which is just a legal term for it's decided, you know, to make certain decisions about how it chooses to use its resources and focus those on these warning letters primarily with claims.

The FDA has a real concern and I think it's a legitimate concern that people who will forego the treatments and the medications and supplements that their physicians prescribe for illnesses and go to CBD based on these claims, and that's the biggest fear and there's the confusion with the consumers. But the other point that I think it's a little more subtle and sometimes difficult for people to understand is that these claims can't be made even if they're true. So, you know, there is some evidence that CBD can reduce or minimize certain types of tumor growth. There's evidence that CBD can, you know, assist in certain types of...or situations with anxiety or whatnot. And these studies are preliminary and new, but regardless, you know, the FDA says you cannot make claims like this about the CBD and it's really important.

And I'll also note sort of as I wrap up the response for this question is, these letters are actually very helpful because, in this age of CBD, a lot of the issues we're dealing with is frankly a lack of regulation, a lot of confusion and a lack of laws and rules and everything else. In a lot of other areas of law with a lot of other products, there are very strong and comprehensive regulations that we can rely on in advising clients. Margaret's had a long history with FDA regulations, and I'm sure she could attest it, you know, in a lot of situations you know exactly what to tell the client.

That's not the case for CBD and the hemp industry at large. You know, it is a new industry. Hemp was only recently legalized, CBD is the new thing, and Congress and state legislatures and agencies are way behind the curve on keeping up with rules. And so as lawyers advising our clients, it's always helpful when an agency does put something out there publicly. Even if we disagree with it, that at least it gives us some guidance as to where that agency's thinking is and how we can advise our clients. So from that perspective, these letters are helpful and they say, don't make claims. You just can't do it, period.

Joe: And Margaret, as a manufacturer and distributor of premium CBD products from Hemp Bombs, Nature's Script and Perfect Paws Hemp for pets, what are some of the steps that we've taken to ensure that we don't make false claims about our products?

Margaret: So again, just to reiterate, I think what Rod said, he kind of talked about it from the legal perspective but I do want to say from the consumer perspective. I think if you're a consumer and you're asking yourself should I be choosing to purchase this particular CBD product? I think common sense says if somebody is making some kind of claim about a product and it's gonna fix or cure or something there's a good chance that that's not gonna work. Forget just CBD. I mean you can go on the internet and look at stuff and people claim they'll do anything. I think common sense tells you that's probably not true.

And the FDA, I mean, as much as it kind of gets...you know, people say they're so difficult or they're hard to work with, I mean their goal is to protect the consumer and that's really what they're doing. It's not to be difficult and it's not to say, "Hey, we don't think CBD might have some utility." What they like is science and they're looking for people to do true science studies, double-blind clinical trials that prove that it does do whatever someone says it does. And it may turn out that what they're saying, they do the clinical studies and it is usable and you can make those claims. That's true for all products on the market. The FDA is just trying to protect the consumer.

From our perspective at Global Widget and all of our different brands, what we really focus on is making sure that not only on the labels itself, which we're very careful with in terms of not making claims, that the labels not only follow FDA guidance but also follow FTC, which is the Federal Trade Commission. And so there are also a lot of rules about what you can put on labels outside of the FDA. So consumers also need to be aware of the fact that you don't want to violate those rules also.

The other thing you want to look for is making sure that you don't have social media, particularly on the web or in your blogs and those kinds of things, questions, answers that you're not, again, reiterating some type of information that's false because just because a particular person has had a certain result with the product or they think they've had that result, that doesn't necessarily mean that it works that way. And so we're very careful. We screen all of our posts to our social media site. We actually have a social media policy. We have agreements with our affiliates that say, "Look, you know, we don't want you to make claims."

And again, I think it's really important, common sense tells you if somebody's out there saying this cure is everything, we know that that's not true. Just common sense tells you that ain't gonna happen. So be careful about that. And I think the third thing you want to look at is just the advertisement. You know, what is the tone and tenor of the advertisement? What is that CBD manufacturer saying about their product? I think all of those things can help a consumer choose a good partner, whether it's through retail, wholesale, or if you're purchasing online. The rules are the same whether you're a consumer buying something in a store or you're a consumer buying something online. And that's what they should really look for.

Joe: And we'll wrap up with that very scenario, both in the store and online. And, Rod, I'll start with you. You know, quick advice to retailers and folks who are selling CBD products in-store, are there certain words they should stay away from using when trying to sell products to consumers directly in a retail environment?

Rod: Well, you know, as far as specific words, there are probably a number of words, but I think the general rule is if you find yourself discussing how a CBD product with a customer or, you know, how a CBD product is helpful for some sort of a medical or health condition then you're probably violating the Food, Drug, and Cosmetic Act and you shouldn't be doing that. And so the things to focus on with respect to consumers are the things that...and making a sale are the things that you always should be thinking about, is this a quality product? Is it made by a reliable manufacturer? Is there information online about the product? Is it a good value, you know, as far as the money in terms of what's in it?

And if you're a retailer that's wanting to sell a product, do you have a relationship with the manufacturer or distributor that you can count on? You know, is this a company that's been around that's available...? You know, in this era of CBD, there still are regulatory issues that come about. There's still a lot of confusion with, you know, law enforcement officials that you have a distributor or a retailer that you can reach out to in case you're having some obstacles that you're dealing with and that manufacturer or distributor will support you in those things.

And I can say as someone who's representing Global Widget for several years, that Global Widget has always been very much on top of that. And that's not...I mean, I guess it is technically a plug for Global Widget, but it's an example of a company that really wants to do it right. You know, we're not making claims. We're supporting our retailers and our affiliates in how they market their products. We're available as resources on the legal side or the scientific side or so on and so forth. So I think those are some things that our retailers should be thinking about.

Joe: And you talk about, you know, what's in the product and Margaret will wrap up on this point, you know, in regards to claims when you talk about the packaging is, as part of that packaging is a consumer can see exactly what's in that product just by looking at the lab results?

Margaret: That's correct. Certainly, if you're a consumer, we've talked a couple of times about what they should be looking at on a label. They definitely need that QR code. If you're purchasing product that does not have a QR code that accesses the certificate of analysis, you know, that's a red flag. You shouldn't buy the product even if it's a good value in terms of price. It's clear that that manufacturer is not following any of the state rules in that all the states require the QR codes with the access to the certificate of analysis.

But other things they should look for, you know, are there a list of ingredients. I mean, it seems really simple but it's surprising how many people don't do that. Is there an expiration date? How long does the product last? A lot number, that means that they're trying to follow GMP. Does it have information about who to contact if there's a problem like a 1-800 number or a website? Again, those are just easy things that any consumer whether purchasing a product online or in a store can really quickly look at and decide whether or not this is a quality manufacturer.

Joe: Well, I want to thank the both of you. Rod, I want to thank you for appearing on our podcast again. I didn't get to see you this time. Hopefully, the next time we'll have you back in the studio. But until then we hope you and your family stay safe and healthy and keep up all the great work.

Rod: Thanks. Same to you and Margaret and I look forward to being down in the studio next time, hopefully, sooner rather than later.

Joe: And Margaret I want to thank you of always for appearing on our podcast. I enjoyed our conversation today with the both of you. And I want to thank you, our listeners, for tuning in to this episode of the "CBD University Podcast." Don't forget to visit our website at www.globalwidget.com for all our past episodes. And you can subscribe to our podcast on your favorite podcast platform to get notified when new episodes are published. We hope all of you also stay safe and healthy during this time. I'm Joe Agostinelli, the host of the "CBD University Podcast." Thanks for tuning in.

These statements have not been evaluated by the Food and Drug Administration. CBD products are not intended to treat, cure, or prevent any disease or condition. Always consult your personal physician about CBD and using CBD products. CBD should never be used by anyone under the age of 18. This podcast is not intended to provide legal advice regarding the legal status of CBD and CBD products.